China’s sharp export growth brings more trade disputes

A week after the European Union announced an antidumping tax on Chinese shoes on March 23, the EU and the United States have filed a WTO complaint against China over auto parts and the EU said it would resume an antidumping tax on Chinese color televisions.

Three trade disputes in ten days have sparked concerns that China needs to change its mechanism for trade development.

WTO statistics showed that from 1995 to 2005, China was subject to more antidumping investigations than any other members in 11 consecutive years.

About one sixth of the antidumping cases launched by WTO members involved China, including 51 investigations in 2005.

China is involved in an increasing number of trade disputes with both developed and developing countries, said Wang Shichun, director of the fair trade department of China’s Ministry of Commerce.

Other countries and regions are investigating Chinese-made textiles and other labor-intensive light industrial products, as well as capital-intensive products such as rolled steel, and investment and intellectual property rights, Wang said.

In European countries and the United States, the social problem of unemployment caused by growing imports has imposed greater pressure on political leaders, said Yang Danhui, an expert with the Chinese Academy of Social Sciences.

China, with its distinct advantages in labor and resource costs, is a competitive trade rival of both developing and developed countries, and therefore a major subject of international trade protectionism.

In 2001, China’s foreign trade volume stood at US$509.6 billion, seventh in the world, but in 2005, the figure jumped to US$1,400 billion, third in the world.

In 2005, China’s exports stood at US$762 billion, up 28.4% year on year, and was leading in the world in exports of textiles, apparel, footwear, color televisions, motorcycles and air-conditioners, according to the Ministry of Commerce.

About 100 million Chinese workers are dependent on foreign trade, figures show.

Although exports continue to grow, manufacturing margins are low and accompanied by serious environmental pollution and a huge consumption of resources and energy.

The rapid trade increase showed the imbalance between investment and consumption, said Wu Jinglian, a leading Chinese economist, who suggested the government should stimulate domestic consumption rather than depend heavily on exports.

The Ministry of Commerce, on the other hand, calls on Chinese companies to encourage innovation and create self-owned brands to develop technology and profit rates, and to control quantity and avoid trade disputes.